After following a slump rally for two days in a row, the Cable appeared to head up for recovery today. In the early hours, the GBP/USD pair was lingering near 1.2433 level or 23.6% Fibonacci level. However, in the middle of the day, some upbeat UK economic data encouraged the pair bulls. Though there was a positive drift in the pair's movements, the gains remained limited under 1.2449 level or 50% Fib level. Anyhow, the overhead lying strong SMA conflux would have confined any additional growth in the pair's daily movements.
Most of the UK economic reports released on Wednesday came in-line with the consensus estimates. The most crucial June YoY CPI data recorded 2%, in-line with the market hopes as well as the previous figures. Nevertheless, the June YoY Core CPI reported 0.1% above the last 1.7%. Notably, the June YoY UK Retail Price Index and PPI Core Output remained the same as the market expectations.
Meanwhile, today, Prime Minister Theresa May broadcasted a piece of advice to her successor. May would leave the office in 7 days, allowing the next PM to take the lead. She mentioned that "Whatever path we take must be sustainable for the long-term - so that delivering Brexit brings our country back together. That has to mean some kind of compromise,"
The drowning Fiber finally found a stoppage near 1.1200 level on Wednesday. Anyhow, the 50-day short term SMA ensured to restrict positive pair movements. Inability to make an intense price action kept the pair's daily volatility confined within this short term SMA. Even if the pair breaches and crosses above this aforementioned resistance, bulls would set the 100-day and 200-day SMA confluence as their next target.
Quite noticeably, the June YoY Eurozone CPI data and May Construction Output data release caught market attention. The Eurozone June YoY CPI and CPI Core reported 0.1% higher than the street expectations. Somehow, the low volatile May YoY Construction Output came around 2.0% over 2.4% forecasts, pleasing the bears.
After marking the day's opening near 1.3090 level, the USD/CAD pair hardly saw north throughout the day. The pair appeared to respect the descending triangle pattern, revealing a nearby breakdown. Key pair driver - the USD Index was moving southwards. Also, the CAD remained low amid weaker reports. The Relative Strength Index (RSI) continued to move hand-in-hand with the pair's movements, showing higher chances of reversal than a continuation.
The most significant BoC June YoY CPI Core reported 0.6% lower than the market expectation of 2.6%. Also, the BoC CPI Core MoM data recorded 0.0% as compared to 0.1% estimates. At around 14:30 GMT, the EIA Crude Oils Stocks Change computed since July 12, recorded -3.116 million over the previous -9.499 million.
More than a month old, symmetrical triangle pattern continued to stay in the cards for the US Dollar Index , restricting its upside. Also, the US economic docket failed to provide the Greenback any support. The June MoM Housing data showcased some disappointing figures, taking away investor interest. This time, the Housing Starts statistics dropped to 1.253 million as compared to the last 1.265 million. Also, the Building Permits Change came near 1.220 million over 1.300 million estimates.
This article was originally posted on FX Empire
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